Mohicans markets ：MHM Today News

☆12:30 RBA Interest Rate Decision

Market views are mixed on whether it will continue to raise rates or pause them. According to a survey by foreign media, 14 out of 27 economists expect the Australian Fed to raise rates by 25 basis points to 3.85%, while the money market expects it to suspend rate hikes with a probability of 87%.

☆ The following day at 4:30 US API Crude Oil Stock Change

If the inventory is further reduced, it may continue to support the upward movement of oil prices.

☆ Market closure reminder: Taiwan Stock Exchange Corporation is closed for one day due to Children's Day; Shanghai Futures Exchange (SHFE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (CZCE) will not conduct night trading today due to the Tomb-Sweeping Day.

Market Overview

Review of Global Market Trend

On Monday, in OPEC + members unexpectedly cut production reignited market concerns about long-term inflation and sparked uncertainty about the Fed's response, the dollar index once up to the 103 mark, and then on a “vertical roller coaster”, giving back all the gains of the day and once lost 102 mark, finally closed down 0.53% at 102.04; U.S. 10-year Treasury yields rose and then fell, as data showed that the U.S. economy continues to slow, it fell sharply in the U.S. session, and once to a low of 3.4%, and finally closed at 3.415%.

Spot gold opened lower and higher, its Asian trading once fell below the 1950 mark, but in the European session surged, once compared to the intraday low rose $40, and in the U.S. market on the $1990 mark, finally closed up 0.79% at $1984.70 per ounce; spot silver intraday trend tangled, its first up with gold and then down, and then in the U.S. market and gave back some of the gains, finally closed down 0.51% The final close was down 0.51% at $23.98 per ounce.

Due to the unexpected production cuts by OPEC+ members, the two oils have opened higher, WTI crude oil rose to 8% once during the day and remained above $80 during the day, finally closing up 6.27% at $80.93 per barrel; Brent crude oil closed up 6.33% at $84.78 per barrel.

The U.S. Dow closed up 0.98%, the S&P 500 closed up 0.37%, and the Nasdaq closed down 0.27%. The energy sector surged, with Exxon Mobil closing up 5.9% and Chevron closing up 4.16%; Tesla closed down 6.1% after announcing Q1 deliveries.

Market Focus

1. President of Iran Lessi will visit Saudi Arabia.

2. The White House was informed in advance of the oil production reduction plan from Saudi Arabia, but was completely unaware of the reasons for the decision to reduce production. The White House has significantly softened its stance compared to last year's Saudi leader OPEC's announcement of a 2 million barrels per day production reduction, and Biden also stated that the situation is not that bad.

3. US Treasury Secretary Yellen: The banking industry is stabilizing and reiterates support actions for the industry if necessary; The Price ceiling level of Russian oil will not be changed in the near future.

4. European Central Bank Governor Holzmann stated that a 50 basis point interest rate hike in May is “still possible”. If the pace of interest rate hikes is slowed down to 25 basis points, it will be difficult to turn back.

5. Blackstone BREIT had a redemption request of $4.5 billion in March.

6. Federal Reserve Bullard: Interest rates need to be above 5%; There is no consensus on whether OPEC's voluntary reduction in production will have a lasting impact.

7. Atlanta Federal Reserve GDPNow Model: Lowering the US GDP growth rate in the first quarter from 2.5% to 1.7%.

8. The US ISM manufacturing PMI in March has been declining for 7 consecutive months and recorded its lowest value in nearly 3 years, reaching 46.3; The settlement prices of the main contracts of the US and Brazilian oil companies have both increased by over 6%; Tesla, whose production exceeded delivery in Q1, ended down 6%, significantly underperforming the market.

Geopolitical Situation

Conflict situation:

1. Finland announced that it will officially join NATO on April 4th. Russian officials have stated that Russia will strengthen its military forces in the western and northwestern regions in response to Finland's accession to NATO.

2. Zelensky: Next week will be a particularly important seven day period for our defense and victory, as the Ukrainian armed forces are preparing for “planned events and decisions”.

3. Russian Ministry of Defense: The Russian military launched offensives in various directions such as Kupiyansk, Zinchman, Donetsk, etc., eliminating some Ukrainian military personnel and destroying various Ukrainian military equipment. Russian air defense forces intercepted multiple rockets and shot down multiple drones.

4. General Staff of the Ukrainian Armed Forces: The Russian army continues to launch an offensive against Bakhmut and attempts to fully control it. The Ukrainian army has repelled dozens of Russian attacks in Bakhmut, and the Ukrainian air force, missile, and artillery units have attacked targets such as the Russian manpower and equipment concentration area, command post, and air defense system positions within the past 24 hours.

Energy situation:

1. The Russian Ministry of Finance stated that the price of Ural crude oil in March was $47.85 per barrel, 1.86 times lower than the same period last year. Russia's budget revenue this year has declined, of which the oil and natural gas revenue in January and February fell by 46.4% year on year. At the same time, Russian crude oil is being sold to India, Turkey and other countries at a discount.

2. German Chancellor Schultz: We will work hard to help Moldova reduce its dependence on Russian natural gas.

Institutional Perspective

01

Goldman Sachs

Goldman Sachs has launched $3.84 billion in bonds to hedge against the debt brought by Citrix's acquisition of the exchange.

02

SOCIETE GENERALE

SOCIETE GENERALE: The financing progress of governments in the Eurozone is faster than the same period last year

On April 3rd, Ninon Bachet, interest rate strategist at Societe Generale in France, stated in a report that the government bonds issued by sovereign countries in the Eurozone so far this year are slightly higher than the same period last year, completing 32% of the expected annual issuance, compared to 30% at the end of the first quarter of 2022. Bachet stated that the Eurozone has issued 410 billion euros of government bonds so far this year, but due to the expected increase in total supply, the remaining issuance this year is about 100 billion euros more than last year. She stated that the bond issuance progress of the four major bond issuers in the Eurozone - France, Germany, Italy, and Spain - is generally consistent with last year. Among the smaller bond issuing countries, Greece, Belgium, and Finland have made progress in their financing plans compared to last year, while other countries such as Portugal, Ireland, and the Netherlands have lagged behind last year.

03

MUFG

MUFJ: OPEC+'s decision may cause the Norwegian krone to rise 

On April 3rd, MUFJ economists stated that the OPEC+sudden production reduction decision led to a reversal of most of the decline in Brent crude oil prices from last month and brought them closer to the average level of the previous three months. The rise in oil prices should help provide more support for G10 currencies closely related to oil, such as the Canadian dollar and Norwegian krone. The Norwegian krone has been particularly hit hard this year, being the worst performing currency among G10 currencies (the Norwegian krone has fallen 6.5% against the US dollar and 7.2% against the euro so far this year). After referencing short-term valuation models such as oil prices, yield differentials, and stock performance, the bank believes that the Norwegian krone was severely undervalued in March. OPEC+unexpected production reduction may be a catalyst for the Norwegian krone to rise.